It was the searing image that came to define the Palestinian intifada: a 12-year-old boy cowering in terror next to his father in the middle of a gunfight just minutes before being killed by an Israeli soldier’s bullet.

Now Israel has labelled the famous footage supposedly depicting Mohammad al-Durra’s last moments “a blood libel” after publishing an official report that says he may not have died at all and that he was never hit by Israeli gunfire.

An investigation commissioned by Benjamin Netanyahu, Israel’s prime minister, has concluded that the episode may even have been fabricated or staged for propaganda purposes.

Television coverage of Mohammad and his father, Jamal, desperately seeking cover behind a wall after being caught in the crossfire at Netzarim Junction in Gaza in the early phases of the second Palestinian uprising were beamed around the world in September 2000.

It was widely assumed that the boy had died after being wounded in the stomach, with Israeli officials initially accepting that one of their soldiers may have fired the fatal shots in the “fog of war.”

Yuval Steinitz, Israel’s strategic affairs minister, presenting the new report, baldy reversed that verdict by calling news coverage of the incident “a blood libel against Israel, alongside other blood libels like the claims of an alleged massacre in Jenin [in 2002]”.

The 36-page report accuses the France 2 television channel that first aired the footage of reporting that Israeli soldiers had been responsible for the death despite possessing extra video evidence that suggested otherwise.

It said a thorough examination of unedited film shows Mohammad al-Durra to be still alive at the end of the incident.

“Contrary to the claim that the boy was dead, the committee’s review of the raw footage indicates that at the end of the video — the part that was not broadcast — the boy appears to be alive,” the inquiry stated. “The probe has found that there is no evidence to support the claims that the father, Jamal, or the boy Mohammed, were shot. Furthermore, the video does not show Jamal being seriously wounded.”

Mr Netanyahu, who commissioned the investigation last September, said he was highlighting the issue now, more than 12 years later, because the original report and subsequent dispatches had gravely harmed Israel’s reputation. Israeli officials said it had fuelled an increase of anti-Semitism and acts of terrorism against Jewish targets worldwide.

“It is important to focus on this incident, which has slandered Israel’s reputation,” Mr Netanyahu said. “This is a manifestation of the on-going mendacious campaign to de-legitimise Israel. There is only one way to counter lies and that is through the truth. Only the truth can prevail over lies.”

The report said France 2’s dispatch “had the immediate effect of harming Israel’s international standing and fanning the flames of terror and hate”.

It added: “The echoes of the al-Durrah report, both in terms of accusations against Israel, and the behaviour of Western media outlets and their local stringers, have continued to resonate in the media coverage of Israel’s operations against terrorist organisations.”

The investigation panel — overseen by Moshe Ya’alon, the former strategic affairs minister who is now defence minister — included specialists from the Israeli police, the army, the foreign ministry and even one of the country’s leading pathologists, whose testimony was central to the conclusion that Mohammad had not died in the incident. It did not include any journalists but the report said the affair “demonstrates the need for media outlets to implement the highest professional and ethical standards when covering asymmetric conflicts”.

The findings provoked angry rebuttals from Charles Enderlin — France 2’s Jerusalem bureau chief, who is heavily criticised in the report — and Jamal al-Durra, who offered to exhume his son’s body.

Mr Enderlin, who is Jewish and holds Israeli citizenship, said: “From the start of the incident, until today, France 2 has shown a willingness to participate in any official independent investigation, carried out according to international standards. France 2 learnt about the existence of the committee from the press — and this speaks for itself.”

It is mission impossible to fake such a huge event. Nobody, least of all the Palestinians, can create such a fabrication

Speaking to Israel’s Army Radio, Mr al-Durra, called Israel’s claims “lies” and said his son had died “on the spot”.

“He died next to me,” he said.”Israel now has a black stain on it in the eyes of the world. They’re trying to erase everything.”

Yizhar Be’er, the executive director of Keshev, an Israeli media monitoring group that has extensively studied the case, dismissed the government report as “conspiracy theory” and said Mohammad al-Durra’s death was real.

“I believe that what we saw on the France 2 news item was exactly what happened and the camera caught exactly what happened,” he told The Daily Telegraph. “It is mission impossible to fake such a huge event. Nobody, least of all the Palestinians, can create such a fabrication.

“In principle, parts of the Israeli establishment are trying to create such a sitution where if we doubt France 2’s pictures, it means we can doubt everything the Palestinians say.

“It’s a pity the Israeli government has decided to re-open this issue without the ability to mount a real investigation.”

Writing in the liberal newspaper, Haaretz, Barak Ravid described the report as “one of the least relevant” government document in years.

“It seems as though the report was written for use within Israel alone,” he wrote. “The evidence and arguments that were presented might convince the already convinced, but no more than that. The committee could not present any ’smoking gun’ evidence showing the 25-year old al-Durra sunbathing on a Gaza beach. Not even close.”